Omnichannel & Multichannel Retailing – The Ultimate Guide

Of all the buzzwords bandied about by marketing pros, omnichannel and multichannel are two that apply to ecommerce sellers large and small. The strategies and tactics behind these terms aren’t reserved for big-budget players at all. In fact, there’s a good chance you’re putting some into action already.

Below we’ll explore what omnichannel and multichannel selling actually mean and how these concepts impact everyday business. Then we’ll show you ways that small sellers and even shoestring startups can deliver both, right from the start.

Throughout this guide, we’ll explore ways that modern ecommerce platforms help small sellers deliver an omnichannel experience. One of our favorites is Lightspeed–not only do they offer great omnichannel sales tools, but they also offer a POS system, multi-location management, inventory tracking, and even a free online store! Click here to check them out.

1. Omnichannel vs. Multichannel, What’s the Difference?

Let’s start by defining both terms:

What is Omnichannel Selling?

Omnichannel selling is an overall business strategy that delivers a seamless experience from the customer’s perspective. However a buyer interacts with a company: online, in-store, mobile app, email, and more, their experience is connected. To deliver this seamless experience, sellers tie sales and marketing activities in a central data hub, shift to a customer-centric approach in all areas, and employ analytics at all levels. So, we can say that:

Omnichannel selling is customer-centric and connects all activities to create a seamless buyer experience.

What is Multichannel Selling?

Multichannel selling is simply selling products using multiple sales channels. Do you sell using just your website? If so, you’re not a multichannel seller. But, if you sell on your website, a mobile site, a Facebook Shop, and Amazon, you’re a multichannel seller. So we can say that:

Multichannel selling is reaching buyers on two or more sales channels, and these can be connected or not.

How Do These Concepts Differ, and Why?

Multichannel selling is always part of an omnichannel strategy. But, simply selling products on multiple channels doesn’t create an omnichannel experience. To do that, your sales channels, payment methods, and other aspects of your business must connect so that no matter how your buyer interacts with your company, it’s seamless to them.

Congratulations! You’re already a multichannel seller since you sell to customers in four ways: a store, a website, a mobile app, and even a Facebook Shop. Plus, you have a nice email and social marketing strategy that keeps your customers engaged, updated, and coming back.

But does that make you an omnichannel seller? That depends. Do your sales channels and other marketing engagement points all work together? If you’re not sure, here are four questions to ask:

Can your shoppers place an online order and select in-store pickup?

Can shoppers click on a sale item in email to add it to their mobile app shopping list?

Can shoppers login to your website and see past purchases, whether made in-store, online, or via your Facebook Shop?

An omnichannel seller can answer yes to each of these four questions. All of their sales and marketing engagement points are interconnected. This creates a seamless customer experience which is the heart of an omnichannel strategy.

When it comes to an omnichannel approach, Starbucks is a company that clearly gets it. Starbucks has physical rewards cards for those people who like carrying plastic when getting their coffee fix. The plastic rewards cards are integrated with the Starbucks app, which also keeps track of an individual customer’s loyalty points. Cards can be reloaded in the app, on the website, via phone call, or in the store. Promotional messages seen in the app are the same as the point-of-purchase messages that can be seen in the store. Starbucks is omnichannel across its entire marketing strategy.

In contrast, a multichannel seller who answers no to the questions above is not delivering an omnichannel experience. In fact, they’re actually creating roadblocks to sales. While it’s great to reach customers on several channels, let’s see what your customer experiences when these engagement points aren’t connected:

Shoppers can order online, but there’s no in-store pickup option. Boo! Now they have to pay for shipping and wait for their order. Or, they have to spend time searching your store shelves on their way home from work. Roadblock!

Shoppers love your weekly sales emails, but they have to get out of the email, open their app shopping list and add items manually, flipping between screens. Roadblock!

Dang! Your customer’s phone battery died and they’re in the store with a full shopping list saved in their app. But your store clerk can’t help because your store’s point-of-sale and online systems aren’t connected. So your customer shops from memory and forgets three items. They’re unhappy and you miss three sales. Roadblock!

A shopper bought something in-store that they loved, but can’t remember what it was when ordering online. Since your online and in-store sales aren’t connected, they can’t see it in order history, and you lose a sale. Roadblock!

Now, managing sales across several channels is a great start, so let’s not be too hard on our multichannel sellers out there. But the fact is shoppers increasingly expect a seamless experience from all companies, large and small. And when they don’t get it? There’s a competitor out there to fill that spot.

Now you know what these terms mean and how they apply in real-life situations. Next, let’s see how you can connect the multichannel dots to create an omnichannel experience that keeps buyers coming back.

2. How to Incorporate Your Sales Channels

As discussed above, omnichannel selling is a customer-centric approach to your entire business. To deliver that, you need to connect as many engagement channels as possible under one roof. The easiest way to start is by connecting your prime engagement points: your sales channels. For this, you’ll be amazed at what an ecommerce platform can do for you.

Top ecommerce platforms like Square, BigCommerce, Shopify, and Ecwid integrate directly with many sales channels. They even work with point-of-sale systems for in-store sales, With them, you can sell on your own website, in-store, and on Amazon, Walmart, eBay, Facebook, Pinterest, and more. Best of all, they bring orders from all sales channels into one central hub, giving you the basis for a connected omnichannel system. This is a good start.

For example, here’s a look at the many multichannel selling options you get using the BigCommerce platform. Even with their $25/mo. Standard plan, you can sell across all top sales channels, your own site, and even in-store with their Square point-of-sale integration. That’s quite a deal:

Source: BigCommerce

So, rolling multichannel sales up under a central hub isn’t difficult or costly if you turn to ecommerce platforms made for the job.

Next, we’ll look at ways to tie in marketing and other key engagement points to further support an omnichannel operation.

3. How to Incorporate Marketing, Customer Service & Fulfillment

Delivering a seamless experience from the customer’s perspective starts behind the scenes. It starts with bringing your sales channel data under one roof, as we discussed above. But your full operational mindset must shift to a connected customer-centric approach, too. So, you need to:

Apply omnichannel thinking across all operations

From key partners to warehouse staff, everyone needs to understand what omnichannel means, how it impacts your customer experience, and how it can help you grow. If you’re a small, one- or two-person shop, this is a snap to communicate. But if you run a larger shop with staff or teams focused on certain aspects, like marketing, website work, and customer service, you need to dissolve communication and data barriers between these groups.

I actually think omnichannel consistency is easier for very small businesses. We have a few 5-figure ecommerce clients. The owner of each manages every channel, publishing content and responding to inquiries. They have no need to manage across teams or people because they are the voice of the business. Where possible, slightly larger companies might be able to emulate this by making one person or a single team in charge of consistency across channels.

Following our natural foods example above, here are three ways omnichannel thinking impacts operating activities, and some things you can do to get the ball rolling:

Omnichannel Marketing

Omnichannel sellers need to shift marketing efforts toward connected experiences, as in our example above where a customer clicks on a sale item in their email to automatically add it to their app shopping list. Connecting your marketing efforts to customer sales data and online tools like apps creates the seamless experience from the customer’s perspective. And that’s the goal of the omnichannel seller.

“The single biggest difference between omnichannel and multichannel is how you, as a business, philosophically approach customers. With omnichannel, the focus of your marketing strategy is solely on your customers — creating a marketing mix that caters to their needs across channels, digital and physical, and ensuring consistency anywhere they experience your brand. With multichannel, the focus is more on maximizing results within each distinct channel, not necessarily having a cohesive approach. In our experience working with 17 million small and micro businesses around the world, developing a solid customer relationship using an omnichannel approach creates more loyalty, and, in turn, long-term success”

There are many things to explore in the world connected marketing: social, video, and paid ads, are just a start. But good old email is still one of the most effective ways small businesses can market on a budget, so let’s look at that first.

Email Marketing

Email marketing should be a key part of any online marketing program. Here again, top ecommerce platforms let you deliver the omnichannel experience by integrating your sales data with top email systems, as in BigCommerce’s integration with top email platforms:

Source: BigCommerce

Using our Weekly Specials email example, connecting your email list to buyer history lets you target emails to customers who have previously purchased certain products or similar items. Using purchase history to target marketing efforts is omnichannel thinking in action, and leads to far more sales conversions than a one-size-fits-all approach.

Along with email, other marketing methods can be integrated into an omnichannel experience, such as:

Customer Loyalty Programs

Think Starbucks’ fully integrated loyalty program that delivers rewards points and reloadable payments across whatever media the customer prefers: physical cards or mobile app. Cards and apps can even be reloaded online, via mobile, or in-store, completing the omni experience:

Source: Starbucks

Interactive Video Ads

Engagement is key when it comes to omnichannel marketing and cutting-edge groups like PK4 Media bring an interactive omnichannel experience to everyday video. Their XPS platform supports various omnichannel marketing methods, including interactive video ads like this one for Honda:

Source: PK4 Media

Interactive online video ads drive campaigns for many large brands, but can also be tailored to fit small budgets and local businesses.

“Interactive video ads capture the viewer’s attention, are more memorable, and allow real-time targeting of marketing efforts toward the devices and media that drive maximum engagement. The interactive and instantly adjustable nature of engagement-based advertising has proven to increase purchase intent by more than 450%”

Retargeting Ad Campaigns

Have you ever left a website and later notice ads for that site appearing on other websites you visit? This is retargeting in action. Retargeting ads keep whatever potential buyers viewed on your website front-and-center as they visit others. Some highly effective retargeting ads offer buy-it-now coupons or a free gift to increase instant engagement and conversions.

I recently researched multichannel and omnichannel marketing strategies. During my research, I learned that companies with an omnichannel strategy had a 91% higher customer retention rate year on year, compared to multichannel strategies. Some of the most effective ways to support an omnichannel strategy were to use a live chat system on business websites and to make social media responses fast.

Having quick access to weekly email specials, knowing how the mobile app works, and being able to look up items and shopper buying history is a start. Being able to respond to social media comments and chat requests is key, too.

Plus service reps need to know which sales channels are used since customers may connect through Amazon first, then find your website or store. Familiarity with all sales channels and marketing engagement points allows service staff to assist customers every step of the way.

Omnichannel Order Fulfillment

Warehouse staff needs to understand that they play a major role in the customer experience. Each shipped order is a key customer engagement point, and often is the only physical contact you’ll ever have with a customer. Fancy or plain, packaging must be tidy, accurate, and deliver the brand experience. Even if that just means adding coupon inserts, it should be done with care. There are many ways you can craft a branded packaging experience, even on a tiny budget.

4. How to Use Customer Analytics to Know & Grow

Understanding how, and where, customer engagement points become sales is the backbone of a successful omnichannel strategy. So your data needs to deliver more than just basic sales information. You need a total picture that tracks the many routes, or engagement funnels, that customers take to complete a sale. The best ways a small business can get this information are Google Analytics and your sales system.

“In Google Analytics, be sure to use audience segmentation for deep channel insights. There are very basic audience segments that everyone should be tracking: new vs. returning, mobile vs. desktop, and source and medium segments.

You can use these segments to analyze visitors who engaged with specific types of content on your website, and how they behaved. You can do this in two steps. First, you segment visitors who view key pages such as blog content, your About Us page, or support pages; whatever is important to you. Which visitors were on site longer or viewed more pages? Which had higher conversion rates? Are there differences in average order value? Your second step is to take the same visitors and see which traffic sources brought them to your site. This shows you the quality of your different traffic sources, and which bring in engaged, buying customers.”

As with everything else omnichannel, your reporting system needs to track all of your multichannel sales and other engagement points under one roof. An added plus is a system that also lets you track engagement from marketing email campaigns, mobile apps, and social channels. Here is another place that top ecommerce platforms deliver. BigCommerce, in particular, is known for its advanced reporting system that provides much of the detailed analytics omnichannel sellers needs:

Source: BigCommerce

The Bottom Line

Customers now expect a top-tier omnichannel experience from every company they deal with, large and small. Delivering this leads to increased retention and customer loyalty, and is something even small sellers can do. Understanding what it means to be an omnichannel seller, and how it differs from multichannel selling is the first step. After that, it requires a shift in thinking toward a connected customer-facing experience. And that means connecting all of the dots in the background, too.

Tracking multichannel and multi-marketplace sales and marketing efforts under one roof, cross-training staff, dissolving data barriers, and detailed analytics help small businesses deliver an omnichannel experience. Here, small sellers that use omnichannel-friendly systems like BigCommerce, Square, Shopify, and Ecwid are already well on the path toward omnichannel selling.

If you aren’t yet online or are thinking of upgrading to a new omni-friendly platform, Lightspeed can put you steps ahead of the competition from the start.

Have you made the shift toward omnichannel sales and delivering a unified customer experience? Please share your thoughts, plus the platforms and other tools that have worked for you in the comments below.

About the Author

Krista Fabregas

Krista Fabregas is a staff writer at Fit Small Business and editor of the Ecommerce Section. Krista launched her first ecommerce site in 2001, and soon grew to operate two niche B2B and B2C sites, a 10K square foot warehouse, and staff of nine. Combined, her sites sold more than $1.5M annually for several years. Krista now shares her hand-on experience with others looking to expand into online sales. When not helping small business owners launch and grow efficient ecommerce operations, Krista enjoys writing fiction and nonfiction, and riding horses and motorcycles in her hometown of Houston.

Related Posts

Comments (2)Disclaimer: Reviews on FitSmallBusiness.com are the product of independent research by our writers, researchers, and editorial team. User reviews and comments are contributions from independent users not affiliated with FitSmallBusiness.com's editorial team. Banks, issuers, credit card companies, and other product & service providers are not responsible for any content posted on FitSmallBusiness.com. As such, they do not endorse or guarantee any posted comments or reviews.Post Your Comment

Hi Krista, you made an important point about product packaging/delivery being for some, the only point(s) of physical interaction with online retailers. It is awful that many retailers don’t get this fact and continue to lose especially new customers and once loyal shoppers to order management flops which can be checked by adopting proactive omni/multichannel
approaches.

Thank you for reading and I’m glad the info hit home. Running my own ecommerce warehouse for 16+ years taught me a lot. I daily reminded my packing and shipping staff that they held our one physical interaction with customers in their hands. That, together with a great incentive program for “clean” weeks — meaning no mistakes in order packing — kept orders straight and customers happy. Cheers! Krista

Social

Contact Us

Disclaimer: We spend hours researching and writing our articles and strive to provide accurate, up-to-date content. However, our research is meant to aid your own, and we are not acting as licensed professionals. We recommend that you consult with your own lawyer, accountant, or other licensed professional for relevant business decisions. Click here to see our full disclaimer.

Product or company names, logos, and trademarks referred to on this site belong to their respective owners.